The Foundations of Shareholder Capitalism

This paper focusses on the separate fund of capital in the company as a separate legal entity as a defining characteristic of  shareholder capitalism that has been utilised by business. The paper considers the claims on that fund by shareholders and by creditors through history. The paper concludes that Courts consistently upheld that separation of that capital fund in the incorporated  form even before statutory limited liability.

In this paper, the value locked in the modern company is termed the Corporate Fund. The Corporate Fund is a feature of the modern company that has been ‘hiding in plain sight’, obscured by contemporary theoretical conceptions that marginalise the significance of the Corporate Fund, and the company as a separate legal entity that locks in that Corporate Fund. The key advance of the modern incorporated company over earlier contractual forms was that the company as an entity is itself a juridical person that has property rights.